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IRVINE, CA—Institutional investors—which RealtyTrac defines as entities purchasing at least 10 properties in a calendar year—accounted for 5.2% of all US residential property sales in January, down from 7.9% in December and down also from 8.2% in January 2013, the firm reports. The January share if institutional-investor purchases represented the lowest monthly level since March 2012, a 22-month low.

Metro areas with big drops in institutional-investor share form a year ago included Cape Coral-Fort Myers, FL; Memphis; Tucson; Tampa; and Jacksonville, FL. However, 23 metros posted year-over-year gains in institutional-investor share, including Atlanta; Austin, TX; Denver; Cincinnati; Dallas; and Raleigh, NC. Metro areas with the highest share of institutional-investor purchases in January included Jacksonville; Atlanta; Austin; Charlotte, NC; and Greenville, SC.

"Many have anticipated that the large institutional investors backed by private equity would start winding down their purchases of homes to rent, and the January sales numbers provide early evidence this is happening," says Daren Blomquist, VP of RealtyTrac. "It's unlikely that this pullback in purchasing is weather related given that there were increases in the institutional-investor share of purchases in colder-weather markets such as Denver and Cincinnati, even while many warmer-weather markets in Florida and Arizona saw substantial decreases in the share of institutional investors from a year ago."

According to Chad Ochsner, owner of RE/MAX, which covers the Denver market, "The Denver metro area did not experience the typical winter slowdown that many markets across the country experienced, and we continue to be very busy. Our January year-over-year sales counts are up about 7%, which is really encouraging. I think it has a lot to do with improved consumer confidence and low interest rates."

As GlobeSt.com reported in January, institutional investors will likely expand their single-family-rental holdings into 2014, but this expansion is likely to be decidedly more restrained than the binge of the past 18 months, according to a white paper from RealtyTrac. Large investors have restructured their acquisition programs around the preferences of public-market and securitization investors—seeking a combination of yield, occupancy and collection standards that are valued by the public markets—the investors who are likely the ultimate owners of these assets, the firm reports.

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Instant Insights /

Institutional Investor Share Shrinks 36% Y-O-Y

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